Foreclosures Down, But Show Signs Of Picking Up Again

After falling earlier this year, foreclosure activity may be slowly picking up again. Foreclosure filings in the third quarter were down 34 percent, but were up slightly from the second quarter, according to RealtyTrac, an online marketplace of foreclosed properties.

Foreclosure filings, which can include everything from default notices, scheduled auctions and bank repossessions, were reported on 610,337 properties in the third quarter, an increase of less than percent percent from the previous quarter and a decrease of 34 percent from the third quarter of 2010. The report shows one in every 213 U.S. housing units with a foreclosure filing during the quarter.

For the month of September, there were 214,855 foreclosure filings, down six percent from August and a 38 percent drop from September 2010. It was the 12th straight month of of a year-over-year decline.

Robo-signing scandal's effect

“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork,” said James  Saccacio, chief executive officer of RealtyTrac. “While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.

Perhaps because loan servicers are being more careful in how they execute the paperwork, the time it takes for a home to complete the foreclosure process has increased in the last year. In the third quarter, the foreclosure process took an average of 336 to complete. That's up from 318 in the previous quarter.

Nevada, California, Arizona post top state foreclosure rates

Once again, most foreclosures took place mostly in a small number of states. Nevada posted the nation’s highest state foreclosure rate — one in every 44 housing units with a foreclosure filing in the third quarter.

Overall Nevada foreclosure activity decreased from the previous quarter thanks to decreases in scheduled auctions and REOs, but default notices in Nevada increased 15 percent from the second quarter to the third quarter — boosted in part by a 16 percent month-over-month increase in defaults in September.

California default activity also increased on a quarterly basis, and the state documented the nation’s second highest foreclosure rate — one in every 88 housing units with a foreclosure filing during the quarter.

One in every 93 Arizona housing units had a foreclosure filing in the third quarter, the nation’s third highest state foreclosure rate. Arizona foreclosure activity dropped 25 percent from the previous quarter and was down nearly 40 percent from the third quarter of 2010.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Georgia, Florida, Utah, Michigan, Idaho, Illinois and Colorado.